Dollar Holds Ground As Fed Stands Pat
The dollar was steady on Wednesday, after the Federal Reserve held off on further easing measures for the sluggish economy.
While Ben Bernanke and company resisted a third round of quantitative easing, the central bank signaled it is prepared to offer further accommodation if the recovery fizzles.
The Fed acknowledged an encouraging rise in household spending, but trimmed its outlook for economic growth, warning that “significant downside risks” remain.
The Fed now sees 2011 GDP between 1.6 percent and 1.7 percent, 2012 GDP between 2.5 percent and 2.9 percent, 2013 GDP between 3 percent and 3.5 percent.
The dollar held near $1.3750 versus the euro, having eased a bit from this week’s high near $1.36.
There was little movement versus the yen, with the buck stuck at Y78. Japanese authorities intervened on Sunday to help the dollar from a record low of Y75.55.
Jobs figures released this morning suggest that the labor market is improving incrementally, but too slow to put a dent in an unemployment rate hovering above 9 percent.
ADP said private sector employment increased by 110,000 jobs in October following an upwardly revised increase of 116,000 jobs in September.
In Europe, Greek PM George Papandreou, who rattled markets on Monday by calling for a public referendum on austerity measures, was due in Cannes for an emergency meeting with German Chancellor Angela Merkel and French President Nicolas Sarkozy.
The leaders, along with representatives of the International Monetary Fund, are meeting ahead of this week’s G-20 summit.
